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Warehousing and Storage Industry to attract INR 45000 Cr by 2020

ram@justransact.com 2018-04-07 11:07:00

Due to rapid growth in e-commerce logistic developments and implementation of uniformed taxation system through GST, India’s storage and warehousing industry is expected to grow at a rapid pace attracting investment to the tune of Rs 45,000 crore and creating job opportunities for 200,000 people between 2018 and 2020.

 

According to the leading analytical and professional service firm, Jones Lang LaSalle (JLL) India, Rs 45,000 crores will find its way into creating storage infrastructure facilities for non-retail and retail business entities across India. 

 

Pointing out that there will be a whopping 200,000 jobs creation from 2018 to 2020 through different categories of warehousing with different levels of specializations and specifications, the JLL report reasoned the significant growth prospects of warehousing sector to the unified taxation system introduced by the Government of India through Goods and Services Tax (GST) system and buoyancy in the growth of E-commerce businesses in India which necessitated creation of more warehouses various capacities in different locations. 

 

Though major cities have almost reached saturation point in terms of offering commercial space, the growth of warehousing will be focused in the peripheral locations of Tier 1 and Tier 2 cities with these cities receiving nearly Rs 10,000 Cr in 2017 itself.

 

Warehousing, among all the categories, will attract a significant investment of over Rs 35,000 Cr in the coming three years through developing storage facilities for consumer and retail goods. While Agriculture warehousing and Cold Storage will see an investment of about Rs 7,500 Cr, Container Storage will attract about Rs 500 Cr in the same period. Agriculture and Cold Storage are the two sub-sectors of Warehousing will attract more contributions as these sectors decide the regular living and lifestyle for the future generation, the report noted.

 

Commenting on the growth of India’s logistics and warehousing industry, Ramesh Nair, Country Head and CEO of JLL India, said: "Warehouse and logistics in recent times has emerged as one of the prospective areas of growth which can contribute significantly to India’s GDP. Since 2014, Warehousing space has been receiving INR 125,000 Cr investment through Private Equity, and the share is expected to grow further in the coming years.”

 

He also emphasized that the country’s warehousing and logistics sector is fast transitioning through a revolutionary phase. With India's logistics industry recently being rewarded with infrastructure status, it has provided the impetus for added interest and investments," Ramesh Nair said.

 

The report also listed prominent tier II cities where the logistics and warehousing will see significant growth in the coming years. The cities are: Surat, Kanpur/ Lucknow, Ranchi, Madurai, Coimbatore, Ludhiana, Ambala, Tiruchirapalli, Nasik and Jaipur.

 

The burgeoning E-commerce business and customers’ expectation for short turnaround time for delivery have prompted the growth of warehousing in the country. Apart from E-commerce, white goods and electronic too are significantly increasing warehousing spaces in semi-urban and urban areas, the report added. 

 

The JLL report also pointed out significant growth of real estate space for warehousing purposes across various cities. It estimated that Grade A and B warehousing space will see a considerable growth of 21% CAGR year-on-year increasing the tally of warehouse space in India to 247 million square feet by 2020 from 139.8 million square feet recorded in 2017.

- K RAMANATHAN   ram@justransact.com

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